tv Power Lunch CNBC November 11, 2013 1:00pm-2:01pm EST
the world spins on its axis. >> you won because i backed you up. bank of america, it's going higher. >> tbf, buy it. >> buy unh. >> stephanie. >> i mike macy's. >> that does it for us. have a great rest of the way. more fast at 5:00. "power" begins now. >> "halftime" is over, "power lunch" and the second half of the trading day starts right now. >> is the retail investor really back? the markets are hitting new records and lots of money is pouring back into mutual funds. some of the smartest money managers in the world will chime in on that. where are stocks going from here? there's a divergence up up up says one group of analysts and strategists. down down down says another. we have the signs you need to watch. and then, of course, we are following this still developing story in the philippines, relief workers are struggling to reach victims of that deadly super typhoon that slammed into the philippines. it killed an estimated 10,000 people. a state of calamity has been
declared. live in manila for that. first to my partner ty in washington at the major investors summit. ty? >> that's exactly right, sue. thank you very much. we're here at the schwab impact conference. 2,000 registered investment advisors, many of whom manage your money, 1100 exhibiters here in my beautiful if often reviled hometown of washington, d.c. we'll talk to some of those investment advisors and find out what they're doing with their money, their views of the marketplace, later on this hour. a busy hour from the schwab impact conference, one of the largest convocations of its kind every year. back to you. >> all right. ty, thank you very much. appreciate it. we'll get back to ty in a few minutes. the dow and s&p 500 trading about above the record closing high levels that we saw. we're up 1573 on the dow, the nasdaq is up 130 and the s&p up .72. the three majors averages up more than 20% this year. how much further can stocks go?
up, up, says seema moody, down down down says dominic chu. ladies first. seema, you're looking at the fund mnls for us. >> that's right. you know some of the experts that track the fundamentals say it's all about the data. the upbeat jobs report, stronger than expected ims services number, signal to investors the economy is turning around. analyst says the encouraging economic data seems to be one of the reasons behind the resurgence in the ek question itty market as well as the ipo market. according to ipo market an lytics, 81 ipos since the beginning of august and the forecast does look strong, 16 ipos expected between now and november 21st. another reason the bulls say the market will push higher, upbeat earnings. the companies that have reported, 70% have beat consensus and according to thompson reuters, the highest since the fourth quarter of 2012. the last reason, europe, getting its mojo back. john at oppenheimer says this has not only helped boost and
broaden investor confidence but also considered a boon for multinational companies that do business in europe. some of those companies include mcdonald's, alex yan pharmaceuticals and auto disk, all three have exposure to europe. sue? into thank you very much. all right. dom, you get to throw a little water on the party and you disagree. >> now, i may or may not disagree but i will say for any trade to work you need a buyer and seller. >> you do. >> say seema is the buyer. i'm going to be the seller hypothetically speaking and some of the reasons why. if you look at the charts i'm taking the technical side of things. it's important to look at something like the s&p 500 because you can see here at the end of our chart the s&p 500 is currently about 3.5% above its 50 day moving average, the shorer term trend line, the batting average for the market. it doesn't happen often but when it does it signals a short-term pull back. that's why some traders are waiting to buy on the dip, if there is one. another one to look at is a warning sign in the marketplace and this has to do with investor sentiment because the investors
intelligence bullish sentiment survey has hit 55%. it doesn't happen very often. the last time it happened, the s&p 500 dropped 5%. that was back in may of 2013. and finally, if you're looking for some leadership, look towards the small cap stocks, the russell 2,000 because that line, again, this is the one we're talking about, the blue one, typically moves alongside the s&p. here, look at that, the green line is the s&p. it's way above the blue line. that means maybe the s&p 500 has to fall to catch up with where the russell 2,000 or small caps are. that's the reason why it's important to take a look at some of these warning signs. >> absolutely. >> maybe buyers but signs for caution as well there. >> thank you so much. appreciate it. we're going to turn now for more signs that the retail investors is back in at this record high territory. we're seeing more money go into stock mutual funds this year. is a tidal wave of money coming? joining us at the nyse, bob
pisani and jeff kilburg at the cme in chicago. i'm going to start with you if i could. one of the signs that i always watch for, is margin debt. and margin debt is hitting record highs in many cases and that to me is a warning sign, but what are you seeing from your perspective? >> well, sue, that is a great warning sign. we are seeing in chicago massive influence. the retail investor is coming back, but i think they're coming back in a different manner, more intellige intelligent, smarter way, and seeing big in flows in a tactical etf. it's essentially a nonmarket cap weighted strategy allows clients invested to profit from downturns as well as upturns. these inflows nearly $50 billion this year, to 20% bump in the space which only makes up about 14% of all the etfs. we're seeing people come in due to the fact that they get inundated, sue, every day a new market all-time high. you want to be tactical, smarter but you are seeing a little bit of paranoia underneath the surface. >> bob pisani, you penned a note on this topic earlier this
morning. give me your perspective. >> the good news is money is definitely going into stock mutual funds in a way that hasn't gone for many, many years. you can put up the screen, i'll show you that there are some very clear trends this year. we've seen outflows generally for five years in the stock mutual funds. this year there's inflows. that's good news. corporate bond funds are still seeing inflows. high yield where everybody put a lot of money is flat to slight outflows where we're seeing some outflows is in treasury bond funds and muni bond funds. i would like to see more of that, more money coming out of bonds and into stocks. i think the trend is good. and i agree with what was said earlier, sue, the sentiment indicators, put call ratios, your investor surveys, the vix, those are flashing a little bit of caution right now. that's the only concern i have. a lot of investors tend to put money in as the market has risen rather dramatically. >> absolutely. that brings me to you, a quick question, how would you recommend or what vehicle, perhaps, better said, would you
recommend if people are getting into the market right now at these record highs for them to protect their portfolio on the downside? give me one easy to understand strategy they can utilize? >> bob hit the nail on the head. the vix, the complacency is indicative, under 13. to break it down when the vix is at 16 the implied volatility means there's a 1% daily move in the market. let's rewind to last thursday and friday, a 2% pop and drop on friday. the vix should be at about 32. that is a warning sign. i like to buy out of the money puts or utilize proprietary vix strategy to protect the portfolio. get into the vix, it's cheap here at 13. >> all right. that's a great strategy. i want to switch gears a little bit. bob pisani there's a lot of talk that traders will no longer be able to utilize chat rooms to get information. what's been the reaction of the guys on the floor? >> that's not good. bloomberg, for example, has essentially what is an instant
messenger type of thing where traders communicate. this isn't just bank traders. this is done across the entire trading industry. and it's a quick way for traders to stay in tuch with each other, get opinions on what they think. this would be very bad if bank traders couldn't interact with each other. being on the phone takes too long, sue. this is the efficient way to do it. as long as it's logged, messages are logged legally for three years, i don't see what the problem is. >> weigh in on this, if you would, jeff, do you use the chat rooms at all? >> we do. it's a critical tool in our communication as well as other portfolio managers. it's unfortunate sue to put it into chicago terms, a few scumbags in the business are taking away a great tool. it's not going to eliminate people. cheaters will always be cheaters, find another platform, another media to front run orders. this is a critical tool we need as portfolio managers, talking to our clients and it being taken away causes a problem. bob hit the head on the nail. it's cumbersome to call someone. you need that five to ten second
text and you have your information disseminated. >> thanks so much. appreciate it very much. >> let's go to dominic chu. he's flashed over to the market flash desk and he's got a market flash for us. >> apple coming off its lows of the session so far after cnbc scott wapner was told by carl icahn he had another good conversation with apple's ceo tim cook about the company's stock buyback situation. he said they both believe the company was under valued. so again, apple shares reacting perhaps to that report, sue. back over to you. >> looks like they are. thanks, dom. see you in a minute. back to tyler at the investors summit in washington. what do you got ahead for us. >> thank you very much. here with 2,000 registered investment advisors, among the many attending the 22nd annual "squawk box" impact c -- schwab impact conference. you don't know them, but they know your money. what they're doing with it after this short break. we'll be right back. ♪
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a> to to a still developing story and the trail of destruction left by the deadly typhoon in the philippines. typhoon haiyan may have killed as many as 10,000 people. authorities say at least 2 million people in some 41 provinces were affected by haiyan. ian williams is live in manila, a massive storm, ian. >> it certainly was, and the
relief effort is now getting under way, but slowly. the logistical challenges are enormous. the head of the philippine red cross described the situation down there as a -- as absolute bedlam. they are beginning to get aid in, the u.s. and philippine military are bringing supplies into the airport in tack low ban. the ngos, aid agencies talking about bringing stuff in by boat. the u.s. military, the marines, are concentrating on things d desperately needed such as water, shelter, water purification tablets and stuff they can help children who have been particularly affected by this. but one of the problems is that many areas have still not been reached. the rescue efforts have still to get to some of the outlying areas, some areas particularly hard hit where power is still down, communications are out, and the roads are blocked.
so yes, the aid effort is getting under way, but it is slow and there's an enormous amount that needs to be done there. >> ian, thank you very much. ian williams with nbc news in manila for us. let's check out shares of tesla. the stock rebounding as concerns over recent car fires has died down. over the weekend the owner of the latest model s to erupt in flames said he would buy another one in a heart beet. given the severity of the accident he thinks the car save the his life. tesla up almost 5% on t trading session. back to dominic chu. >> how about go go shares doing just that, going up and up. the in-flight wireless communications and networking company reporting a smaller than expected loss on better revenues. the results showed 24% more airplanes are using the company's services and the average sale per user was up 21%. it raised its full year profits and sales guidance.
a little behind that pop in trading today. back off to tyler mathisen at schwab impact. >> thank you very much. how do you throw a party for 2,000 investment advisors? 1100 exhibiters? this guys know, bernie clark, executive vice president at schwab and head of schwab adviser services. you've done this a long time. how is this event different from let's say five years ago? what's the difference? >> i have done it a long while. although there's commonalties we've seen such a growth momentum and advisors are keeping their clients, winning in the marketplace, got them on a long-term track and they're celebrating. it's a good time. >> you did a survey in which 70% of the advisors said that they thought their businesses were poised for growth. what do they see as the future of their business? the population is aging, that's one part of the clientele, but there is a new population behind them. >> absolutely. they've enjoyed double digit growth over the past five years, hard markets to be part of.
and so when they sit back and they look and see the next generation, they're preparing themselves. they're starting to engage more aggressively in the social media. technology, trying to bring more to bear. >> one of the things that stood out in the survey to me was the finding that more than half thought that their clients were not demanding, that's probably too strong a word, but were inclined towards low cost etfs and index funds. what does that tell you about what we would think of as traditional stock trading, the purchasing of individual securities by individual investors? >> no question the world has become a slightly more passive and cost is a big part of that component. 42% acknowledge that they don't know the investment vehicles their clients might want in the future and may not have been invented yet. >> probably not. the older clientele, i am a part, they want reliable income. >> yes. >> how is that being provided to these customers today? >> it's critical. i join you in the older set as
well, and we have to make sure that begins to satisfy the need for guaranteed income investment and something that's going to be out there for them in the future. something they can add no their portfolio with the bonds and stocks. >> congratulations on the event. always good to see you. >> thank you very much. nothing you said but i'm going to leave you now. >> thank you. >> i'm going to talk to three individuals managing individuals' money. andrewberg of homrickburg in atlanta and elaine beetle of beetle financial and david. i'll be your server. a little parfait to make the interview go down a little bit better. there you go. >> thank you, tyler. >> a little feedback but that's all right. we got spoons for you. elaine, ladies first. you know, the question i want to know is what are your clients asking you and what are you telling them? are they nervous? content? conplacement? >> i think they're a little in the middle. the way we do our work with our
clients as advisors we're setting an asset allocation that makes sense for them and makes their money do what it needs to do for them. that may mean they're in the stock market for that growth side of it if they have time to leave their money there and grow but if we've got requirements on the portfolio to distribute money to them on a regular basis, our rule of thumb is that five years worth of fixed income has -- or five years worth of distributions has to be on the fixed income side. educate our clients well, they understand that and so even though they don't like when the market gets really volatile, of course they love it now that it's been going up for a while -- >> volatile up is okay. >> volatile down is not so good. but, of course, they're not real happy with what we're getting on fixed income. we've managed that fairly well. >> if i had to guess, david, they're not real happy about what has been happening in washington, d.c. >> not at all. the volatility is so paramount in their minds it creates a fear and almost a disgust at the lack
of cooperation that they're receiving from d.c. >> what would you like to see? what would they like to see out of washington? some sense of get a deal, make things stick? no matter whose deal it is or what? >> they would like to see a sense of responsibility back toward the investor, toward the voter, instead of personal, political careers. especially at the leadership level within congress and within the administration. >> so how does that affect what you do with their money, andy? how does washington affect what you do? >> well, you know, what's going on in the economy and the government, of course, is separate from what's happening in the stock market. and they don't coincide, unfortunately. so the logic -- >> the stock market is not the economy. >> the stock market is not the economy. we have, you know, the economy hasn't grown fast, still a jobs problem and we have the political mess. with the accommodative policy that fed has we think that stock market could keep going from where it is, although it's pretty lofty. >> are you worried that people have been sucked in and that
they may get whacked yet again? >> yeah. a bit. >> how do you protect them? >> well, like the other advisors, we allocate assets and protect our assets as best we can but we're not market timers. we're in the stock market, but we're also trying to protect their money and our clients seem content. >> it's been a five-year bull market basically, four years from 2009 to now. >> right. >> what's next? >> well, i mean i think we need to be cautious and with our clients we don't want to put them in the market if we can't leave the money there five years. heing for them. there's going to be pullback. the way the market works it's so much influenced by psychology. if we get a little bad news we see a little bit of a retraction. as we did when the fed decided there's concern the fed might stop their easing. >> you heard bernie talk about the prefb lens of index funds and etfs and portfolios. what kind of products are you putting in your clients'
portfolios? >> what personally is saying is the relationship is becoming much more important than product. products can be used to generate results, but those results are only important if they're achieved against the clients' goals. what advisors within the ria industry, registered investment adviser industry match those up. >> what products are they leaning towards? low cost index? >> certainly that is a trend where you can get the performance without the cost, yes. >> you also finding that? >> we've, for example, on the u.s. equity side we've got passive. we're big believers in etfs, big believers that paying managers will not produce excess return. >> are investors, your clients smarter today than five years ago? >> i think they are. i mean i think they pay more attention with the 24/7 news that they get feeding to them, so i think they're a little smarter but they're a little concerned because they don't dig deep and understand. a lot of times they're at the
surface, kind of listening to what's going on and getting concerned over that many times. but -- >> quick one, two, three. are retail investors back? >> yes. with the help of the registered investment adviser. >> they are which gives us concern. >> i think so too. but, you know, i think our clients are cautious and i think that's healthy. >> i guess so. if you're cautious that's a good thing. andy, thanks very much. elaine, appreciate it. david. enjoy your desers there. >> thank you. >> sue, back to you. >> thanks, all. appreciate it very much. hedge funds that don't hedge. we'll tell you what's going on and what it's signaling about whether stocks can keep going higher. plus, amazon all the time. the on-line retail giant making sunday delivery a reality. what it means for amazon, the post office which will be delivering those goods, and for amazon's rivals like walmart. we're back in two. (vo) you are a business pro.
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back to dominic chu, she tried to say, for a market flash. >> thanks, sue. how about shares of best buy at session highs after ubs upgraded the stock to a buy rating from a neutral on expectations increased cost savings will lead to higher earnings. it raised its price target to $49 from $35 a share and jeffreys hiked its target to $52 from $40. back to you. >> speaking of valuations and whether or not the market's too topee, morgan stanley's scott devist becomes one of the first buy side analysts on wall street to say internet stocks are too expensive and cut the sector to in line citing sky high evaluations. removed google's from the firm's best idea list saying their catalyst has played out. he remains overweight on the stock. one bellwether he likes is amazon a stock he thinks has attractive growth adjusted valuations. speaking of which, time for the "power lunch" countdown.
john fortt at the stock exchange to talk about amazon. good to see you as always. >> hey, sue. >> amazon's teaming up with the u.s. postal service to start delivering packages on sundays, set to begin in los angeles and new york a little later this week. so what does this mean for amazon? >> might seem like an odd pairing, innovation and the postal service, but it could help both here. it's interesting, three things that jeff bezos the ceo likes to talk about are price selection and speed and the shipping issue sunday delivery really speak to speed. amazon had about almost $3 billion in losses from shipping costs so it's clearly something they want to invest in. speed particularly important in some of the home good areas where amazon's trying to move in. if you're not sure whether you're going to order that cereal or something like that from amazon, if you know you can get it in a couple days, maybe on sunday, you're probably more likely to order it. >> just in time for the holiday shopping season too. you know a lot of people are saying this is an absolute lifeline for the u.s. postal service.
what do you think? >> i took a look at some of the numbers here, sue, and last year, looks like the postal service lost nearly $16 billion. i took a look at their annual report to congress for 2012, looks like shipping and packages brought in $11.6 billion in 2012. now, the postal service is projecting just a $6 billion loss for today. i doubt just adding that one day of sunday delivery would make a huge difference, it won't hurt, but this isn't going to completely change the business outlook for the postal service. >> it does, though, kind of give them a cooler image in a way, because amazon's very cutting edge and i think it certainly couldn't hurt the postal service, right? >> particularly among the kind of higher demographic amazon prime audience, ordering that on friday, trying to figure out when it might arrive based on that gap day. you're going to be happy to see the postal worker on sunday if you need that thing for the coming week. just remember to keep the dog inside. >> keep the dog inside and that
goes for fedex and for ups as well. don't let the uppy out. what does it mean for the rivals? >> rivals out there, i mean i think it doesn't mean that much except that amazon is likely to retain its loyal customer base. i think the key was sunday delivery is, it's only important if you've got a promise like that amazon prime two-day promise where you know the thing is going to arrive on sunday. if you're not home on sunday and the package arrives i don't know if you're that happy ability it. >> john, thank you so much. appreciate it. interesting story to say the least. >> yeah. >> john it ffortt. prices closing right about now. jackie deangelis is tracking the action at the nymex. hi. >> good afternoon, sue. we are watching gold futures, trading lower today. but staying above the key level of 1278. that's a key technical level. traders are a little tentative today, take something profits here. but the major leg down that we saw, below 1300, that came last week after the ecb lowered rates and we had that better than expected jobs number. meantime in the pits today
talking about janet yellen's confirmation is a the game changing event this week because we will hear from her about some of her views on monetary policy and get a little better sense of who she is. meantime we're watching the rest of the complex as well and even though we had a bullish number out of chain that, that industrial production number for october we're still seeing silver and copper prices rather flat. we are watching palladium and platinum, the biggest losers on the day. back to you, sue. >> thank you, jackie. we've all heard about flipping homes but what about flipping corporate jets? what some millionaires and billionaires are doing to cash in. you got to hear this to believe it. managing america's money, the top three issues that keep your personal adviser up at night and how you can protect yourself. weekdays are for rising to the challenge.
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yahoo! rising on news that alibaba which it holds a 24% stake did $5.7 billion payment volumes on china's singles kay. and tata morts lower after they downgraepdsed the indian car maker to hold from buy and cited valuation for that. as we close out 2013 many are reevaluating their portfolio according to findings of financial planners. the three biggers fears of clients. 70% say they're worried about rising health care costs, long-term care insurance and how it will affect their retirement nest egg. 50% concerned about the impact of rising interest rates on their portfolio and 45% are worried about the tax laws, especially capital gains and the medicare surcharge for high income earners. we're starting a new segment today on personal finance here on "power lunch" and joining us are members of the cnbc digital financial adviser network, a 20
member group of financial executives with cumulative assets under management of about $23 billion. brittney is founder and ceo of financially wise women. tim joins me here in studio, vice president of the financial consulate. welcome to both of you. nice to have you with us. >> thank you very much. >> tim -- >> thank you. >> let me start with you, tim. we listed some of the top three concerns. but those aren't obviously the only concerns. what are you hearing from your clients about what they're most worried about? >> these and plenty more, what these have in common, sue, they're all big uncertainty items. a lot of uncertainty fatigue back to 2000, like we would never know which cataclysmic thing could happen the next day. that's what i'm hearing from clients right now. all three of those mentioned unrest in the middle east, europe, still having some difficulties in recession and deepening into depression in certain areas, many factors what they all have in common is uncertainty. >> brittney, are you hearing that same thing from your clients and what advice are you
giving to your clients as we go into year's end? >> yes. there's definitely uncertainty but, you know, my advice for clients is always to plan and prepare for the future and really take action on things that they can control. so a lot of the advice that i'm giving my clients at this time of the year is to max out their retirement plans, really make sure that they're rebalancing their portfolio and getting back into that original alignment based on their risk tolerance and the goal and consider harvesting any capital losses they might have in their portfolio. >> increasing your allocation. on the homefront checking and savings when things are unsirte certain you don't know what's going to happen next, might have difficulty in employment have cash on hand but also in your portfolio. if you get scared cash is the one thing you can be guaranteed even in 2008 not to lose money
on. >> how many of your clients are interested in strategies for protecting their portfolio, for hedging their portfolio? obviously you want to stick with your financial plan, and it's important to have that, but as we get to these new record highs on almost a daily basis, do you sense a nervousness or a skittishness in your clients as it pertains to the stock market? >> yes, and no. i mean, there's definitely always concern with investing and that's where financial planning comes in and that's what i preach in the work that i do and really help my clients put a plan in place to help with a lot of that uncertainty in the fear around investing because when you have a proper asset allocation and financial plan that says here's how much you need to invest for your retirement goal, then you can follow more of the buy and hold strategy, make sure you get, you know, the right insurance policies in place, make sure like tim said you have cash as well to act as a cushion so you can stay the course, but really, financial planning helps i think ease a lot of those concerns
every day americans have and everyday investors have with the stock market. >> tim, do you advocate reexamination of the portfolio at a stage like this where we're at record highs and do you advise reallocation or hedging strategies al. >> absolutely. maybe macro changes. looking looking at the bond potential bubble, with bonds having enjoyed a bull run this is time, for example, to possibly take specific actions there, reducing your durations and possibly looking at some other alternatives for yield. at the same time, i think brittney's absolutely right. you've got to have a plan, but we should be re-examining our clients as well. something changed in them, are they getting closer to retirement, has the risk tolerance changed. >> changed jobs? career changes? >> we can make changes as a result of their lives in their portfolios to help make it yeeser. >> are they generally optimistic about the market? >> not particularly. >> they are not? >> which is record highs.
>> and i think people are scared more than ever. >> that's so fascinating. brittney, what are you hearing about, you know, because we're talking today about the individual investor get in at some say dangerously high levels, are they optimistic about the financial markets? >> maybe i work with a different clientele. my -- most of the clients i work with are women and i think women in general are more optimistic about just the direction of america and the economy and i think that's really what you have to do when you're investing for the future. i mean there's so many things like tim said that we can do to really minimize as much risk, we can rebalance our portfolios, assess if there had been any changes in our financial lives, but at the end of the day you're investing in the future of america and i'm an optimist at heart and at some point we have to have that faith and we have to believe that over time, 20, 30 years, the markets are going to go up and that's really, again, where i come in and talk about investing for the long term and staying the course,
making sure you have a plan in place and really now is the time to reevaluate that plan. >> i think to tim's point, to your point, tim, i find it interesting, that they're generally not optimistic about the markets which maybe is why we're not seeing the larger outflows from bond funds into stocks yet. >> i think you're absolutely right. when you think about the patterns, one could argue that we've been in a secular bear market since 2000 and really have not broken out of that. that's what people are still fearing. they experienced 2008/2009, 2000, 2001, 2002. we need to help them balance their objectives going forward and their justifiable pessimism. >> thank you very much. tim mauer, appreciate it very much. brittney, thank you very much. >> thank you. >> for more news and advice about your investment plans visit the fa hub at fa.cnbc.com. if you're a financial adviser get reports from thought leaders on the latest trends and strategies as well. that's it from here.
down to you. >> sioux, thanks very much. the market rally surges on and now some hedge fund companies are launching long hedge funds. hedge funds that don't hedge. possibly the sign that the market is a little topee. you've heard of flipping houses. how about flipping private jets? yes. you got to have one to flip one. a lot of people are doing just that. we'll examine both of these when we return on "power lunch."
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rating. the stock fell 20% on friday following a third quarter beaten fourth quarter guidance above street forecast. very much to the upside, sue, rocket fuel, fuel, the ticker over there. back over to you. >> thanks, dom. this veterans day we thank those who have served our country, but a cnbc investigation has found that the department of veterans affairs health care system is plagued with problems. >> i am outraged at his treatment that day. >> reporter: as a sister begged and pleaded to get help for her brother, army veteran joseph petite who took his own life, she says, as a result of being overmedicated. >> he took over 20 pills a day as prescribed. >> reporter: which caused him to hallucinate. >> they found him several, several hours later in the bathroom where he had committed suicide. >> we have a specific instance in atlanta where there were suicides that happened, drug overdoses that happened, within the facility, and these
individuals actually got bonuses. >> the va told us it has been strengthening the facility's mental health program and initiating new procedures for supervised drug screens, visitors and hazardous items management and escorts for patients. for the full documentary go to investigationsinc.cnbc.com. >> many veterans are unaware they could be losing out on their social security benefits. a survey found that many did not realize the hit that they would take if they claimed early. claiming at 62 means they lose a quarter of what they could receive. those who wait until 70 will increase their benefits by 8% per year. so claiming at 62 would get you $900 a month. hold out until 70 if you can and you'll get nearly $1600 a month. vets should also be aware if they served 20 years or more they can receive both military
retirement pay and social security at the same time. 30% of those surveyed were unaware of that particular. we fit. we'll take a quick break and some hedge funds are launching long only funds. but is this a sign that the market has hit its peak or not? does it have much more room to run? "power lunch" is following this trend and we are back in 30 seconds. welcome back to "power lunch." signs that individual investors
are getting back into the market. we asked for your take on that in today's yahoo! finance poll. and 21% of you say it is time to get out. 44% say they miss the boat. 35% say i'm not worried. the markets will continue to climb. all right. let's go down to ty. what do you got coming up for us, ty? >> actually, thanks very much, sue. kate kelly joins us now, following a story about so-called long only hedge funds. kate, it seems to me that a long only hedge fund is like a typical equity mutual fund at 8 times the cost. what's the story here? >> well, tyler, interesting story in the "wall street journal" about a number of players getting into this invest vesting. you've heard long short equity funds which do bullish and bear bets on stocks. this is long-term value stories. why not a new thing there does seem to be more activity in this
area. a couple names, tiger global management is one, coatu, juddson founders fund and hound partners, some of the names you probably never heard but they have begun by famous accolates of hedge fund managers or managers themselves. arguably, though, they're a little late to the game. >> i assume that they're charging the typical fees that hedge funds charge, the 2 and 20% of profits. that is a serious bag of mow tatos to carry -- potatoes to carry around as a hanty cap. >> that is something that the article discusses and some charge the standard others are giving investors a little relief. there's a trend towards lower fees. i think we're going to see a pullback from the 2 and 10 and maybe a 1 and 10 as investors get more demanding. >> you hinted the concern some of these funds may be joining the party a little bit late. is it possible that had this is sort of the sign of a top? >> well, it's certainly one of many things that makes you think
why didn't this get going a little earlier in the cycle? take a look at the s&p, through the end of october, up more than 25% whereas your average hedge fund only 7% and in the hedge fund long only space about 11%. you're really not seeing performance on par with the markets. a hedge fund defender would say look, hedge funds are by nature hedging other investments, not always going to do as well as the market, also won't do as badly as the market in bad times. >> well, very interesting there. pay extra money to get 7 %. before you go, kate, you're going to be with cnbc and the exclusive coverage tomorrow of the deal book investor conference in new york city. who's going to be there and what kind of insight should we be looking for? >> we're excited because andrew ross sorkin is sitting down for an extremely rare interview with dan loeb the hedge fund manager of third point. a true multistrategy fund, not only do long and short stock investing they also do
structured products, macro bets, all sorts of things. they go active. we'll be taking that live. other key players who are going to be there tomorrow and i'll be bringing you highlights throughout the day, tesla's elon musk, barry diller, ray dalo from bridgewater associates. a lot of interesting color. >> interesting lineup. thank you very much. we'll be looking for it tomorrow. back to you, sue. >> thanks, ty. all right. flipping we know has been big in real estate but now it's popular in private jets. wealth editor robert frank is following the money as always, hey robert. >> billionaires are going crazy for the latest gulf stream jet, some paying $6 million above the retail price just to get one. we'll tell you who's buying, who's selling and why. coming up after the break. (vo) you are a business pro. maestro of project management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle...
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welcome back to "power lunch" on cnbc. i'm sheila dharmarajan. we did start the day out in the red but now climbed back to flat levels. lot of winners and losers to talk about. let's talk about those stocks in the green because leading the way yahoo! and tesla. yahoo! getting a bump from singles day a shopping holiday in china. tesla regaining some of the losses up about a percent today. remember, this stock has been down about 22% in the past month. speaking of the biggest losers here, kla is that after getting a downgrade, the company downgraded to neutral. want to mention the momentum stocks, a group which has been getting a lot of attention, mixed picture. swe have facebook and reagain ron in the red but priceline and n netflix trading higher. apple google and microsoft trading lower on the day.
back to you. >> we'll go to dom for a market flash. >> how about looking at rda micro electronics after it agreed to be bought by china's unigroup for $910 million or 1850 a share on friday it offered $18 a share, topping another offer. there were earlier reports of a purported other offer for the company, now they've come out and said rda micro electronics there isn't anything substantive to those talks just yet so again, watch those shares higher right now. back over to you. >> by 3.5%. thank you very much. we've all heard about flipping houses, that's been big in real estate for some time. but what about flipping a private jet? cnbc's wealth editor robert frank joins us with the details. i guess i should have seen this one coming. >> exactly. >> but really? >> yeah. we didn't really see the numbers coming. billionaires are going crazy for a new jet. it's the g had-650 from gulf stream. this plane was launched last year. oprah and ralph lauren have reportedly ordered one.
the status symbol. it has the longest range of any gulfstream about 7,000 nautical miles, super fast, very roomy, the price $64.5 million. people are flipping them for over $70 million. billionaire bernie ecclestone the formula one chief flipped his for over $71 million. that was a profit of more than $6 million. now brokers tell me two other unnamed billionaires have flipped their jets for similar amounts and two more are currently in the works. why would somebody pay $6 million over retail? well, it's time. if you order a g-650 today you won't get it until the third quarter of 2017. for some it's worth that $6 million to avoid the three-year wait. now the g-650 craze thins in stark contrast to the broader jet market which is still in a slump. delivery less than half their 2008 peak. among the richest of the rich jet setters the market is really strong right at the top. >> if you have to wait until the
third quarter of 2017, it could be passe by then. >> exactly. a new jet into there could be a new jet. >> for these people $6 million is pocket change. >> please. all right. thanks very much, robert. really? all right. the biggest stock winners of the day coming up next when we continue on "power lunch." ♪ wow...look at you. i've always tried to give it my best shot. these days i'm living with a higher risk of stroke due to afib, a type of irregular heartbeat, not caused by a heart valve problem.
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let's get you caught up on the markets right now and we have the dow jones industrial average up about 12, almost 13 points. s&p is up three quarters of a point. nasdaq is up almost 2 points. the bond market is not traded today so that is the yield as of friday's close at 2.74%. bond market is closed today in observance of veterans day. the big winners, jc penney up almost 5%, best buy up almost 4%, and transocean up sharply as well, up 3.25%. ty at the schwab conference in washington, d.c. what's the mood like down there, ty? >> you know, i think it's -- i think it's cautiously optimistic. you and i have been coming to events like this for a long time and you can see the ebb and flow of the markets, 2008, 2009, attendance was down, palpable fear. today if there's fear it's fear that people may be a little bit
too complacent, that they have once again grown too accustomed to a market that only goes up. the other thing you notice, sue, is how these kinds of events have changed. sure, there's the food, some of it pretty good, some not so good, the tote bags, but there are charging stations and social media. that will do it from the schwab impact conference for this edition of "power lunch." >> "street signs" begins right now. see you later, it ty. somebody forget to tell the markets they're due for a drop. the dow continues to climb and two very smart investors here with their playbook as we already start thinking about what to do next year. your other hot topics on this veterans day. we go undercover investigate waste, abuse and dangerous conditions in the va hospital system. you need to see this. we're going to meet a company that wants to hire more than